Gold Confiscation?

The subject of gold confiscation seems to be a recurring theme.  There are more and more questions about it as the price of gold rises and the freedoms in American wane.  Do you buy numismatics to avoid gold confiscation, can it happen again?  Did it happen in the past and what are the chances of it happening now?  Today I will walk you through gold confiscation and all the dirty little secrets that may affect your gold investments as I examine the  greatest fear of gold investors, gold confiscation.

Nancy Pelosi said it best when commenting on the unconstitutional abortion that is the Health Care Bill, or as it is commonly called “Obama Care”.

“But we have to pass the bill so you can find out what is in it, away from the fog of the controversy.”

The height of arrogance and disdain for the rights of “we the people” is unbridled and clearly demonstrated with that statement.  Unfortunately for us her words have been proven true.
Tucked away in the “Obama Care” bill is this little passage.

“…starting on January 1st in 2012, US federal law will require coin and bullion dealers to report to the Internal Revenue Service all gold and silver coin purchases and sales greater than $600.”

Why would that be tucked in the 2,300 pages of the health care bill? It is there because the bill isn’t about health care, it’s about government control!!!! We are living through a Marxist/Socialist takeover of the United States by progressives like Pelosi, Obama, Reed, Frank, Dodd and et al. The radical left cannot win elections or pass their agenda with the full light of day shining on them, so they are trying to jam everything they can into the bills before they lose their majority in Gongress.  This is truly the tyranny of the minority.

I will come back to the assault on freedom by the current regime after a look at a little history.  This is the executive order (#6102) that President Roosevelt signed into law On April 5, 1933.

The Gold Confiscation Of April 5, 1933

From: President of the United States Franklin Delano Roosevelt
To: The United States Congress
Dated: 5 April, 1933
Presidential Executive Order 6102

Forbidding the Hoarding of Gold Coin, Gold Bullion and Gold Certificates By virtue of the authority vested in me by Section 5(b) of the Act of October 6, 1917, as amended by Section 2 of the Act of March 9, 1933, entitled
An Act to provide relief in the existing national emergency in banking, and for other purposes, in which amendatory Act Congress declared that a serious emergency exists,
I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said section to do hereby prohibit the hoarding gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations and hereby prescribe the following regulations for carrying out the purposes of the order:

Section 1. For the purpose of this regulation, the term ‘hoarding” means the withdrawal and withholding of gold coin, gold bullion, and gold certificates from the recognized and customary channels of trade. The term “person” means any individual, partnership, association or corporation.

Section 2. All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion, and gold certificates now owned by them or coming into their ownership on or before April 28, 1933, except the following:

(a) Such amount of gold as may be required for legitimate and customary use in industry, profession or art within a reasonable time, including gold prior to refining and stocks of gold in reasonable amounts for the usual trade requirements of owners mining and refining such gold.

(b) Gold coin and gold certificates in an amount not exceeding in the aggregate $100.00 belonging to any one person; and gold coins having recognized special value to collectors of rare and unusual coins.

(c) Gold coin and bullion earmarked or held in trust for a recognized foreign government or foreign central bank or the Bank for International Settlements.
(d) Gold coin and bullion licensed for the other proper transactions (not involving hoarding) including gold coin and gold bullion imported for the re-export or held pending action on applications for export license.

Section 3. Until otherwise ordered any person becoming the owner of any gold coin, gold bullion, and gold certificates after April 28, 1933, shall within three days after receipt thereof, deliver the same in the manner prescribed in Section 2; unless such gold coin, gold bullion, and gold certificates are held for any of the purposes specified in paragraphs (a),(b) or (c) of Section 2; or unless such gold coin, gold bullion is held for purposes specified in paragraph (d) of Section 2 and the person holding it is, with respect to such gold coin or bullion, a licensee or applicant for license pending action thereon.

Section 4. Upon receipt of gold coin, gold bullion, or gold certificates delivered to it in accordance with Section 2 or 3, the Federal reserve bank or member bank will pay thereof an equivalent amount of any other form of coin or currency coined or issued under the laws of the Unites States.

Section 5. Member banks shall deliver alt gold coin, gold bullion, and gold certificates owned or received by them (other than as exempted under the provisions of Section 2) to the Federal reserve banks of there respective districts and receive credit or payment thereof.

Section 6. The Secretary of the Treasury, out of the sum made available to the President by Section 501 of the Act of March 9, 1933, will in all proper cases pay the reasonable costs of transportation of gold coin, gold bullion, and gold certificates delivered to a member bank or Federal reserve bank in accordance with Sections 2, 3, or 5 hereof, including the cost of insurance, protection, and such other incidental costs as may be necessary, upon production of satisfactory evidence of such costs. Voucher forms for this purpose may be procured from Federal reserve banks.

Section 7. In cases where the delivery of gold coin, gold bullion, or gold certificates by the owners thereof within the time set forth above will involve extraordinary hardship or difficulty, the Secretary of the Treasury may, in his discretion, extend the time within which such delivery must be made. Applications for such extensions must be made in writing under oath; addressed to the Secretary of the Treasury and filed with a Federal reserve bank. Each applications must state the date to which the extension is desired, the amount and location of the gold coin, gold bullion, and gold certificates in respect of which such application is made and the facts showing extension to be necessary to avoid extraordinary hardship or difficulty.

Section 8. The Secretary of the Treasury is hereby authorized and empowered to issue such further regulations as he may deem necessary to carry the purposes of this order and to issue licenses there under, through such officers or agencies as he may designate, including licenses permitting the Federal reserve banks and member banks of the Federal Reserve System, in return for an equivalent amount of other coin, currency or credit, to deliver, earmark or hold in trust gold coin or bullion to or for persons showing the need for same for any of the purposes specified in paragraphs (a), (c), and (d) of Section 2 of these regulations.
Section 9. Whoever willfully violates any provision of this Executive Order or these regulation or of any rule, regulation or license issued there under may be fined not more than $10,000, or,if a natural person may be imprisoned for not more than ten years or both; and any officer, director, or agent of any corporation who knowingly participates in any such violation may be punished by a like fine, imprisonment, or both.

This order and these regulations may be modified or revoked at any time.

Franklin D. Roosevelt
President of the United States of America
April 5, 1933

That is the executive order, in its entirety that has caused all of the commotion. Some gold sellers claim that because of the executive order, you should only buy numismatics because they can’t be confiscated under the executive order pursuant to:

“Section 2 (b) Gold coin and gold certificates in an amount not exceeding in the aggregate $100.00 belonging to any one person; and gold coins having recognized special value to collectors of rare and unusual coins.”

Who is to say that the government under the direction of  “The Community Organizer In Chief” won’t issue a new directive that allows them to confiscate “numismatics”.  Government is all about power and The “Community Organizer In Chief’s” government is all about expanding the governments power in the name of the Marxist/Socialist state that was the “dreams” of his father.   The “numismatic” argument is so specious  as to be totally laughable.

If you hold physical metal, it should be as close to spot price as possible.

Governments exercise power over you from the barrel of a gun. Don’t ever forget that, and don’t say that it can’t happen here.  This regime is hellbent on doing as much destruction to the United States and its Constitution as it can while it holds the Presidency and the Congress.  If you think that they will not issue a presidential directive to confiscate numismatics, if they want to, you are incredibly gullible, not to mention stupid! It’s what governments do when they face political crisis and financial meltdowns, namely, they change the rules in mid game to keep themselves in power.

The US Government can, and will, do whatever it needs to do to survive economic and civil crisis. In the worst-case scenario, financial collapse, every law or custom can be changed instantly by a Presidential Executive Order.  That’s the truth, no matter what the nay-sayers preach.

A Brief History of Gold Confiscation

The Great Depression that followed the stock market crash of October 24, 1929 plunge the U.S.A. into a financial crisis, the likes of which we had never experienced, until now.  It may be a coincidence (I think not), but during that crisis the country elected a “progressive”, Franklin Delano Roosevelt to the office of the Presidency.  “Deja vu” all over again and we have the “progressive”  Barack Hussein Obama, “ Community Organizer In Chief” running the show during the next best thing to the “Great Depression”.

President Roosevelt called the Congress into an emergency session on March 5, 1933, one day after his inauguration. At his urging, the House and Senate immediately passed:

“An Act To Provide Relief In The Existing National Emergency In Banking, And For Other Purposes”

“The Community Organizer In Chief” launched his Progressive agenda on March 23, 2010, fourteen months into his administration, with the Health Care Reform Act which included the most an odd insertion into the bill which ostensibly dealt with health care.

“…starting on January 1st in 2012, US federal law will require coin and bullion dealers to report to the Internal Revenue Service all gold and silver coin purchases and sales greater than $600.”

“Never let a good crisis go to waste.” Rahm Emanuel

During the depression, everyone felt that a law to provide “emergency relief for the banks”, was a good thing.  It was natural to look for help from your government, right?  Well, what the citizens desired was not what they got.

President Roosevelt wasted no time in exorcising his new power. He signed Executive Order 6102 on April 5th, 1933 and Executive Order 6260 on August 28th, 1933. Order 6260 revoked and super-ceded 6102. Basically, it became a federal crime,with steep penalties of a $10,000 fine and or up to 10 years imprisonment for any US citizen seeking to protect his wealth by simply possessing physical gold coins or bullion which they had purchased legally with income that had already been taxed.  The government change the rules in mid game!

Just eight  months later, new Federal legislation known as the Gold Reserve Act of 1934 enacted on 30 January, 1934 revalued gold versus the dollar. The official price was raised from $20.67 USD per ounce to $35.00 USD per ounce. Had the American people been allowed to keep their legally purchased gold, they would have almost doubled their money and the depression would have been much shorter and less severe on the public.

Did The Government Go Door To Door Confiscating Gold?

The US Government did not send armed soldiers house to house to confiscate gold.  They mandated that you turn it in.  Gold coins that were turned in were exchanged for legal tender Federal Reserve notes (fiat currency) on a dollar for dollar basis. A $10 gold coin was taken and the presenter given a $10 bill. Gold bullion was exchanged at a rate of $20.67 per ounce of gold. This was the official US government figure for one ounce of gold.

Pretty good deal until the Gold Reserve Act Of 1934 was enacted.  Is it possible that the government knew ahead of time that it was going to rewrite the rules ahead of time?  Not here, this is America and we are free!

Because the government is so benevolent, it also required notes clearly marked as gold certificates had to be surrendered, because technically you could walk into a bank and demand gold for them.  These benevolent protectors of our freedoms never miss a trick!

In keeping with the benevolent theme, a citizen could legally keep a total of $100.00 face value of US gold coins or US Gold Certificates. A family of four could have kept $400.00 face value of coins  and a family of seven could have kept $700, so it is pretty simple, $100 per citizen is all the gold that they were allowed to possess according to the benevolent government. It didn’t matter whether you had gradually acquired them or recently purchased them, you were required turn them in because the government changed the rules!

Will The Government Confiscate Gold Again?

The US Government has done it before and legal precedent, no matter how disingenuous, is favored in the law.  Don’t doubt this for a second, if the US Government is forced to back the US dollar in a credible fashion, this may be their only alternative.  “Quantitative Easing” could easily paint the government into a corner where they have no other alternative but to devalue the currency to the point where they would have to link it to gold before the currency collapses.

What Would Stop Them from Confiscating Gold?

Let’s start with the obvious:  It’s freaking Un-Constitutional! After considering that, we are left to ponder the obvious, since when has that stopped anyone in the current regime that we live under?   All kidding aside, confiscation of gold would result in open rebellion.  I don’t think the Marxists are ready to risk it, but then, their arrogance knows no bounds. They live to trash the Constitution at every turn. The redistribution of wealth is their stated goal.  What better way to do it than to confiscate gold and silver in all forms, namely physical gold, stocks, ETFs etc..

What Is The Answer To The Gold Confiscation Question?

Do what you think is right! The government has no right to things that you purchased legally.  If you sell gold at a profit, then you are obligated to pay taxes on the gain.  If an entity tries to steal your gold are you obligated to give it to them, I don’t think so.  Gold should be stored in your possession on your property, or somewhere else that is secure, so that you have access to it if the situation warrants. Gold and silver are real wealth and they should be a portion of everyone’s portfolio. You need both.  Gold is the large bills and silver is the change.

I am sensing that we are rapidly reaching the cross roads where gold will cease to be a commodity and become the real currency that it has always been.  Gold Will Be The Currency Of Last Resort in the near future. With that thought in mind  it is imperative to look at the average American and, once we do, you realize that “Joe Six Pack” can’t buy gold at these prices.  Than is why you need to pile into silver at these prices.  The “poor man’s” gold will run along with gold when gold takes off.  No one gets left behind!

Gold will trade at $1,300 per ounce before the end of 2010.  I hope that is all it does, because the alternative is a hyper-inflation moon shot.  I for one would like to see that alternative delayed for a while.

Gold investors and goldbugs ponder gold confiscation all the time.  That should be the least of their worries!  If confiscation comes you will have to deal with your survival instinct first before you deal with any un-constitutional government mandates.  I suggest that you put gold confiscation on the back burner and worry about gold accumulation.  In the long run, gold accumulation will serve you better.

Till next time, good luck and good trading!

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• Is Virginia To Issue Gold and Silver Coinage?
• It is Time for Gold Investing!

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